Big Banks Called Out For Lack Of Diversity

CBx Vibe:It’s All About the Benjamins” Diddy

By Lesley Green-Rennis

  • Black & Latinx talent comprise 4% or less of banks’ executive and senior-level employees
  • Companies with 100 or more employees are required to submit workforce diversity data to the federal government each year

For years, the banking industry has voiced support for workforce diversity, but you would never know by looking at their top ranks. Not one bank is headed by a woman or person of color. Unfortunately, Black & Latinx talent comprise 4% or less of banks’ executive and senior-level employees, and 6% or less of mid-level leadership. The industry’s reputation as an ‘old boys’ club has made it a target for Congress. Recently, lawmakers stepped in and called big banks out for their lack of diverse leadership.  

Why This Matters: Banks and other financial services firms are asked to voluntarily supply diversity and inclusion data. However, most do not and those that do, fail to publicly disclose their diversity reports. This lack of transparency led Congresswoman Maxine Waters (D-CA) and Congresswoman Joyce Beatty (D-OH) to ask 44 of America’s largest banks, those with $50 billion in assets or greater to share their diversity data directly with the House Financial Services Committee.

Citigroup, one of the few outliers in the report, is using a  NFL Rooney Rule-like strategy to meet its goals

The Committee analyzed the data and produced a report that found only 29% of senior and executive level positions are held by women and only 19% were from a racial or ethnic minority group. Despite recent pledges to do better, the nation’s biggest banks continue to be bastions of white men.  

In this first-of-its-kind report sparked a dispute between Democrats and Republicans over whether the industry should be required to report diversity data. Citigroup (C -10.23%), one of the few outliers in the report, is using a  Rooney Rule-like strategy to meet a goal of having 40% of assistant vice presidents and above roles filled by women by the end of 2021. The Rooney Rule, first used to diversity NFL leadership, has been adopted across business sectors and is considered an industry best practice to increase diversity.

What’s Next: The report recommended legislation to require banks to share their diversity data with their regulators and the public. Additionally, the committee wants banks to track their efforts at increasing the diversity of partner firms, and to publicly disclose the diversity of their boards. This is the first of several deep dives the Committee will take into the diversity practices of the financial services industry.  

CBx Vibe:It’s All About the Benjamins” Diddy

CONTRIBUTOR

Lesley Green-Rennis

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